Abstract The introduction of highly active antiretroviral therapy (HAART) has significantly decreased the morbidity and mortality among HIV-1 infected people. However, the development of drug resistance poses a serious threat to the treatment options available to patients. Furthermore, recent reports of failure in clinical trials of Merck HIV-1 vaccines and several microbicides reinforce the critical need to identify and develop new targets for anti-HIV-1 drugs. Novel drugs will broaden the scope of combination therapy and will help in reducing development of drug-resistant HIV-1 variants. The capsid domain of the HIV-1 Gag polyprotein plays a critical role in virus assembly and maturation and therefore represents an important potential target for developing drugs for AIDS therapy. We propose to develop novel anti-HIV-1 agents targeted to a highly conserved hydrophobic pocket and to the dimerization interface in the C-terminal domain (CTD) of the HIV-1 capsid. Our discovery effort will be based on our extensive preliminary data obtained with several rationally designed -helically stable cell- penetrating peptides and small-molecule lead compounds. Our approach will take advantage of our recent solution structure of one of the cell-penetrating peptides (NYAD- 1) in complex with the CTD. We will optimize the lead peptides and small-molecule compounds using a combination of medicinal chemistry and computer-aided design approaches. In addition, we will continue searching the ZINC database by docking- based virtual screening techniques to identify small drug-like compounds which have the potential to bind to the hydrophobic pocket and the dimer interface and inhibit viral assembly and maturation. We will elucidate in detail the molecular mechanism by which these inhibitors disrupt HIV-1 assembly and maturation. The goals of the proposed studies are two-fold: 1) To use structure-based rational design to develop potent cell- penetrating peptides and small molecules that inhibit HIV-1 assembly and maturation and 2) To establish the mechanism by which these inhibitors disrupt HIV-1 assembly and maturation. The capsid CTD-based inhibitors identified in these studies will serve as probes for elucidating the underlying structural requirements in forming immature and mature virus particles. The studies described in this proposal may lead to the development of a new class of antiretroviral therapeutics targeting the HIV-1 capsid.